Mexico: Inflation drops to over two-year low in January
February 7, 2019
Consumer prices rose 0.09% from a month earlier in January, cooling from the 0.70% month-on-month increase in December. According to the National Statistics Institute (INEGI), lower fuel costs drove the moderation in price pressures. Core consumer prices—which exclude volatile categories such as fresh produce and energy—increased 0.20% month-on-month in January, below December’s 0.47% rise.
Inflation fell to 4.4% in January, notably below December’s 4.8% and marking the lowest reading in over two years. The result was below market analysts’ expectations of a softer fall to 4.5%. Lower energy prices were chiefly behind January’s fall. Core inflation also receded, inching down from December’s 3.7% to 3.6% in January.
Annual average inflation fell from 4.9% in December to 4.8% in January.
Mexico Inflation Forecast
Banxico expects inflation to end 2018 at 3.1%. Panelists surveyed by FocusEconomics expect inflation to end 2019 at 3.9%, which is unchanged from last month’s forecast. For 2020, the panel sees year-end inflation at 3.7%.